The Death of the PSTN

Top of Mind

The Death of the PSTN

By Paula Bernier, Executive Editor, TMC  |  November 01, 2011

This article originally appeared in the Nov. 2011 issue of INTERNET TELEPHONY.

Another ITEXPO has come and gone. For those of you who attended, thanks for coming. If you didn’t make it there, you missed out on a lot of good education and networking opportunities, but there’s plenty of time for you to arrange plans for the next ITEXPO.

Either way, we hope you’ll join us for the next ITEXPO. That’s scheduled for Feb. 1-3 in Miami.

One of the many interesting discussions at ITEXPO this fall focused on the migration away from the PSTN and toward IP-based networks and endpoints. Of course, there’s little doubt that IP is our future and the PSTN is the past. But just how long the legacy voice network will hang around remains a matter of debate.

At ITEXPO, a panel of industry luminaries discussed the likely life expectancy of the PSTN, and related issues of the migration from POTS to IP-based voice and other services.

Participants in “2018: The Death of the PSTN” keynote luncheon panel included Daniel Berninger (News - Alert) of Cipher Software; Marc Matthews of Metaswitch Networks; Mitch Simcoe of GENBAND; Payam Maveddat of Taqua; and moderator Richard Shockey, who heads up The SIP Forum (News - Alert).

In response to Shockey’s question as to whether it’s time to phase out the PSTN, Berninger indicated that it is.

“Nobody mourns the demise of the iPhone (News - Alert) 15 when we’re going to get iPhone 16,” Berninger said, noting that the important thing is not what goes away but what’s next.

Matthews of Metaswitch added that it’s time to stop investment in legacy networks and move the focus to application-based environments in which voice is just one app on the broadband network. He added that although we’re already well on our way to the IP transition, there are still vestiges of the legacy network that are hanging on for dear life. For example, said Matthews, AT&T (News - Alert) in some areas doesn’t have replacement cards or maintenance staff to service 25-year-old legacy switches (60 of them), some of which have cards melting in the chassis, yet it continues to keep such infrastructure in operation.

Simcoe of GENBAND said he hopes it doesn’t take a major network failure to accelerate the carrier transition from TDM to IP.

Matthews added that IP has far more redundancy than does TDM, so if there is a geographic failure, service can be backed up to other areas, kind of like the power grid.

The move to IP also can potentially help network operators introduce new services to reduce customer churn and even get new customers and drive new revenues, said Simcoe of GENBAND. IP infrastructure is also preferable to TDM because the former switches can handle millions of customers, while TDM switches top out at 50,000.

But to push everybody to transition completely from TDM to IP, the FCC (News - Alert) needs to set a date certain for this transition, said Berninger, suggesting 2018.

As I mentioned in my March editorialin this space, the federal government’s efforts to reform/update the Universal Service Fund and intercarrier compensation – which pretty much everybody agrees is long overdue –could mark the end of the communications world as we know it. The reform is clearly aimed at moving the nation more fully into the broadband era, in which voice is just another application, and away from the legacy, circuit-switched network and the existing regulation that continues to prop it up.

In fact, AT&T and Verizon have been pushing for the end of POTS completely for at least a couple years already. Clearly, moving away from legacy technologies that are more highly regulated and toward IP solutions is to their advantage.

AT&T submitted the follow comment to the FCC in December 2009: “Any such forward-looking policy must enable a shift in investment from the legacy PSTN to newly deployed broadband infrastructure. While broadband usage – and the importance of broadband to Americans’ lives – is growing every day, the business model for legacy phone services is in a death spiral.

“Revenues from POTS are plummeting as customers cut their landlines in favor of the convenience and advanced features of wireless and VoIP services. At the same time, due to the high fixed costs of providing POTS, every customer who abandons this service raises the average cost-per-line to serve the remaining customers. With an outdated product, falling revenues, and rising costs, the POTS business is unsustainable for the long run.”

Edited by Stefania Viscusi